GBP/CAD Exchange Rate Rises as Brexit No-Deal Fears Ease
UPDATE: In political news, the Pound (GBP) found some uplift against the Canadian Dollar (CAD) today after Labour MP’s Yvette Cooper’s Brexit amendment has received increasing support from the Labour party, which sees the deal as a way of reducing the ‘threat of the chaos of a no-deal’.
Today also saw the announcement of the ‘Malthouse Compromise’ which aims to extend the Brexit transition period and would amend various issues on the Irish backstop, although this has come under heavy criticism for its threat of bringing no-deal nearer.
The ‘Loonie’ has remained without direction today, with no significant data releases and continuing global economic and political shifts leaving the GBP/CAD vulnerable to further fluctuations.
Pound Canadian Dollar (GBP/CAD) Exchange Rate Rangebound as Pound Investors Optimistic on Brexit Amendments
The Pound Canadian Dollar (GBP/CAD) exchange rate is steady today and is currently trading at CA$1.7468 on the inter-bank market.
The Pound (GBP) steadied against the Canadian Dollar (CAD) as the UK faces its parliamentary vote on a series of amendments that will determine and shape the Brexit negotiations between the UK and the EU.
Pound investors have become hopeful that Sir Graham Brady’s amendment – which addresses the Irish backstop issue that prevented many MPs voting for Prime Minister Theresa May’s initial ‘Plan A’ – is a likely contender to Labour MP Yvette Cooper’s amendment, which offers a possible extension of the Article 50 process.
Either of these amendments will likely break the Brexit impasse, allowing May’s Brexit ‘Plan B’ to be renegotiated in Brussels before heading back to Parliament for its final vote from the House of Commons in February.
Liam Fox, the International Trade Secretary, commented:
‘I think we should send the Prime Minister back to Brussels with a strong mandate to be able to say ‘If you compromise with us on this one issue, on the backstop, we would be able to a get an agreement’ – an agreement that is almost there.’
The Canadian Dollar, meanwhile, was weakened yesterday after US oil prices dropped over 3%, and with the Canadian economy so reliant on oil this has had ‘Loonie’ investors becoming increasing skittish.
Canadian Dollar Pound (CAD/GBP) Exchange Rate Steadies
Canada’s on-going political tensions with China is causing the ‘Loonie’ to weaken, with the two nations’ rift having grown increasingly since the arrest of Chinese tech giant Huawei’s Chief Financial Officer (CFO) last year.
This has since been followed by Canadian Prime Minister Justin Trudeau’s demand for the – now former – Canadian Ambassador to China John McCallum’s resignation on Saturday, after comments over these Chinese CFO’s extradition.
The export-reliant Canadian economy is sensitive to global political upheavals, and with tensions between China mounting – as well as assigns of a weakening Chinese economy – CAD has taken a few hits.
Michael White, a portfolio manager at Picton Mahoney Asset Management, commented:
‘I see no real argument on how we can buck the trend of a global economic slowdown and in many ways Canada may feel that slowdown harder and longer than most developed economies.’
GBP/CAD Forecast: Pound could soar if Brexit No-Deal Removed in Today’s Vote
The GBP/CAD exchange rate will be determined by the outcome of today’s parliamentary vote on the various amendments that will be made to Theresa May’s ‘Plan B’ withdrawal agreement, and with any signs of a no-deal being removed from the table, we could see the Pound soar.
Tomorrow, meanwhile, will see the publication of UK mortgage approvals figures for December, which are expected to decrease.
CAD traders will be looking ahead to Thursday with the publication of Canada’s GDP figures for November, and with any signs of an increase providing some much needed uplift for the ‘Loonie’.
Thursday will also see the publication of Canada’s industrial product price figures for December.
The outcome of today’s Brexit vote on May’s ‘Plan B’ will determine the strength for the GBP/CAD exchange rate for the week ahead.